Peter Warr

The private provision of a public good is independent of the distribution of income

Abstract When a single public good is provided at positive levels by private individuals, its provision is unaffected by a redistribution of income. This holds regardless of differences in individual preferences and despite differences in marginal propensities to contribute to the public good.

Welfare Effects of an Export Tax: Thailand's Rice Premium

An empirically based, applied general equilibrium model is used to study the welfare and distributional effects of an export tax when the implementing country possesses some monopoly power in the world market. A method is demonstrated through which a general equilibrium model can be used to find the optimal value of a tax or subsidy. The approach makes it possible to conduct the welfare analysis of a particular intervention in an explicit “second-best” context, to study its income distributional implications, and to explore the sensitivity of the results to variations in key behavioral parameters, structural assumptions, and the governments distributional objectives. Copyright 2001, Oxford University Press.

Export promotion via industrial enclaves: The Philippines’ Bataan export processing zone

The economic merits of export processing zones as a form of export promotion are studied by focusing upon a large, long-established zone in the Philippines. It is shown that although the absence of trade duties and other regulations led the zone to generate significant benefits for the Philippines through employment and foreign exchange earnings, this effect was outweighed by the heavy public infrastructure investment necessitated by the choice of location. Moreover, although the firms occupying the zone are predominantly foreign, over ninety per cent of their investment was financed by government-guaranteed borrowings from within the Philippines.

Thailand beyond the crisis

Contributors Preface Note on referencing of Thai names Map of Thailand Part 1 Background to the Crisis and the Recovery Process 1. Boom, Bust and Beyond 2. Anatomy of the Crisis Part 2 The Social and Political Context of the Recovery Process 3. Pluto-Populism: Thaksin and Popular Politics 4. Socio-economic Consequences of the Crisis 5. Developing Social Alternatives: Walking Backwards into a Khlong Part 3 The New Environmenta for Economic Policy Making 6. Public Sector Reform: A Post-crisis Opportunity 7. Dealing with Debt: NPLs and Debt Restructuring 8. The Implications of a Flexible Exchange Rate Part 4 The Long Term - Human Capital, Urbanization and the Environment 9. Education: The Key to Long Term Recovery? Sirilaksana Khoman 10. Urbanization: New Drivers, New Outcomes Douglas Webster 11. Natural Resources and the Environment Mingsarn Kaosa-ard Index

Vulnerability to a Currency Crisis: Lessons from the Asian Experience

Are currency crises caused by manias and panics in financial markets, or by unsustainable deteriorations in domestic macroeconomic conditions? This question is explored in the context of the recent Asian currency crisis. The theoretical concept of vulnerability is used to identify three early-warning indicators of susceptibility to a currency crisis: rapid accumulation of mobile capital; domestic lending booms; and overvalued exchange rates. It is shown that the crisis and noncrisis countries of Asia may be distinguished empirically, using these indicators, over the decade preceding the crisis. This exercise provides convincing evidence that the crisis emanated largely from domestic macroeconomic conditions.

Pro-poor Growth

Pro-poor growth is often advocated but seldom defined. Some proposed definitions and associated measures are reviewed in this paper. Much of this literature stresses the importance of reducing economic inequality. A basic source of confusion is whether inequality reduction is desired as a means for reducing poverty or as an end in itself. This paper argues that if it is the former, as is usually said, the pro-poor growth literature tends to overstate the importance of reducing inequality, or avoiding an increase. Growth that is most effective at reducing poverty does not necessarily coincide with growth that reduces inequality. This literature is overly pre-occupied with statistical evaluation of the outcomes of economic events, based on changes in the distribution of household incomes or expenditures. What is most needed is solidly based empirical research on the manner and extent to which alternative growth strategies influence the rate of poverty reduction.

World food prices and poverty in Indonesia

Spikes in international food prices in 2007-2008 worsened poverty incidence in Indonesia, both rural and urban, but only by small amounts. The paper reaches this conclusion using a multi-sectoral and multi-household general equilibrium model of the Indonesian economy. The negative effect on poor consumers, operating through their living costs, outweighed the positive effect on poor farmers, operating through their incomes. Indonesia’s post-2004 rice import restrictions shielded its internal rice market from the temporary world price increases, muting the increase in poverty. But it did this only by imposing large and permanent increases in both domestic rice prices and poverty incidence. Poverty incidence increased more among rural than urban people, even though higher agricultural prices mean higher incomes for many of the rural poor. Gains to poor farmers were outweighed by the losses incurred by the large number of rural poor who are net buyers of food and the fact that food represents a large share of their total budgets, even larger on average than for the urban poor. The main beneficiaries of higher food prices are not the rural poor, but the owners of agricultural land and capital, many of whom are urban based.

Globalization, Growth, and Poverty Reduction in Thailand

Sustained reduction of poverty incidence in Thailand has occurred over a period of several decades. This reduction in absolute poverty has occurred in spite of an increase in inequality over the same period. The rate of reduction of poverty has been strongly related to the rate of growth of GDP but the increase in inequality has not. The long-term growth of the Thai economy has been associated with a gradual opening to international trade and investment. The paper also reviews the prospects for reducing poverty by raising minimum wages and argues that poverty cannot be reduced effectively in this way.

Long-term Economic Performance in Thailand

Thailands long-term economic growth has been remarkable. This progress has been reflected in the very significant improvement in indicators of well-being, such as life expectancy, infant and maternal mortality, and literacy. Poverty incidence has declined dramatically, but economic inequality has increased. The performance of the education system is chronically weak. Environmental problems and institutional failures in resource management are ongoing. Reform is needed in several areas, including political and corporate governance, trade policy, regulation of industry and the education and health systems. This article attempts to clarify these issues and to suggest the most important areas for reform

Research and Productivity in Thai Agriculture

This paper examines the impact that publicly funded agricultural research has on productivity in crop production within Thailand. It tests empirically the two hypotheses that, first, publicly funded research and development (R&D) in crop production is a significant determinant of total factor productivity (TFP) in the crop sector and, second, that its social rate of return is high. The statistical analysis applies error correction methods to national level time series data for Thailand, covering the period 1970–2006. Emphasis is given to public research in crop production, where most publicly funded agricultural R&D has occurred. The role of international research spillovers and other possible determinants of TFP are also taken into account. The results demonstrate that public investment in research has a positive and significant impact on TFP. International research spillovers have also contributed to TFP. The results support the finding of earlier studies that returns on public research investment have been high. This result holds even after controlling for possible sources of upward biases present in most such studies, due to the omission of alternative determinants of measured TFP. The findings raise a concern over declining public expenditure on crop research, in Thailand and many other developing countries.